BELLOWS FALLS — TransCanada, the owner of the Bellows Falls hydroelectric station on the Connecticut River, is fighting its tax assessment of $108 million, saying the figure should be roughly 20 percent, or $22 million, lower.

At a hearing before the Rockingham Board of Civil Authority on Tuesday night, representatives from the energy giant said the price of electricity was down, thanks to low prices for natural gas, “tightening profit margins” and justifying a substantially lower appraisal and tax bill.

TransCanada is a large purveyor of natural gas.

The value of the dam is based on its revenue potential, said Mark Cleverdon, property tax manager for TransCanada out of its Westborough, Mass., office. Revenue has been falling because the price of electricity is stagnant or falling, he said.

If TransCanada prevails in its tax grievance, the impact on Rockingham and Bellows Falls taxpayers would be substantial. In Bellows Falls, the dam represents half of the taxable property, and in Rockingham, one-third.

The dam has been assessed at $108 million for the past two years, but Cleverdon said TransCanada had chosen not to challenge the assessment until now “out of respect for the lister’s office.”

He said the appraisal by the firm of George E. Sansoucy, who the state hired in 2010 to assess all the dams on the Connecticut River, had inherent flaws and mistakes.

Unlike most of the dams on the river, at Bellows Falls, the power generation takes place on the Vermont side of the river.

Former Select Board member Ann DiBernardo, who was on the board for most of the hydro discussions, told TransCanada officials that what they were seeking would devastate the town.

“Most towns would kill for an asset like this,” said Cleve Kapala, TransCanada’s director of government affairs.

The value of the Bellows Falls dam has gone up and down and up again. In 2005, after a townwide reappraisal the facility was valued at $126 million. Later, the town dropped the appraisal to $90 million, after TransCanada complained.

The Rockingham Board of Listers has already denied TransCanada’s grievance, hence the hearing before the Board of Civil Authority. But Cleverdon made clear that if TransCanada was not satisfied on this level, it would pursue another appeal either in court or to the state.

The Lancaster, N.H., firm that did the appraisal is now consulting with the town of Rockingham over its dispute with TransCanada.

Brian Fogg of Sansoucy defended the $108 million assessment, saying that while the price of natural gas has kept electric prices low, the Bellows Falls dam is highly efficient, generates about 10 percent more electricity than it has in the past, and generates peak power, which is sold at a premium.

Balancing that out, Sansoucy said, is that the price of borrowing money is at an all-time low, reducing the firm’s costs.

Rockingham still hasn’t forgotten what it views as a broken promise by TransCanada from one of its executives in 2005, when the town voted down a proposal to buy the dam from USGen and form a municipal utility. At that time, TransCanada, trying to win over voters to reject the purchase, promised $42 million in local tax revenue over 12 years.

It hasn’t even come close, said Rockingham Select Board Chairman Thomas MacPhee.

Cleverdon said after the meeting that TransCanada had appealed the tax assessments of many of its properties along the Connecticut River, not just Rockingham, but he said he didn’t have the exact count since all are in different stages of grievance and appeal.

The town and TransCanada have been wrangling over the dam’s assessment since shortly after TransCanada bought it in 2005, along with the other hydro dams on the Connecticut and Deerfield rivers, from USGen.

In 2010, the state of Vermont hired a New Hampshire firm to assess all of the dams on the Connecticut in order to help other Vermont towns, including Rockingham, with professional assessment services in their dealings with TransCanada, which is one of the largest energy companies in North America.

The Board of Civil Authority, which hears property assessment disputes, is made up of the five members of the Rockingham Select Board and the elected justices of the peace.

MacPhee appointed three people to visit the Bellows Falls dam and prepare a report for the entire group. They are Alan Ternes, chairman, Lamont Barnett and Douglas MacPhee, all members of the BCA.

Ternes and Barnett are no strangers to the issue of the tax assessment on the hydro dam, as both were involved in the 2000-2001 litigation, when the town won a Vermont Supreme Court decision against the previous owner, USGen.

A final decision is expected within 30 days.

susan.smallheer@rutlandherald.com